Payment by third parties may not reduce the debt but it does increase the number of obligees (creditors). Hence in every one of these foreclosures, except for a minuscule portion, indispensable parties were left out and third parties were in reality getting the proceeds of liquidation from foreclosure sales.

The explanations of securitization contained on the websites of the government Sponsored Entities (GSE’s) clearly demonstrate what I have been writing for 11 years and reveal a pattern of illusion and deception.

The most important thing about a financial transaction is the money. In every document filed in support of the illusion of securitization, it steadfastly holds firm to discussion of paper instruments and not a word about the actual location of the money or the actual identity of the obligee of that money debt.

Each explanation avoids the issue of where the money goes and how it was “processed” (i.e., stolen, according to me and hundreds of other scholars.)

It underscores the fact that the obligee (“debt owner” or “holder in due course” is never present in any legal proceeding or actual transaction or transfer of of the debt. This leaves us with only one conclusion. The debt never moved, which is to say that the obligee was always the same, albeit unaware of their status.

Knowing this will help you get traction in the courtroom but alleging it creates a burden of proof for you to prove something that you know is true but can only be confirmed with access to the books, records an accounts of the parties claiming such transactions ands transfers occurred.

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

What you won’t find anywhere in any diagram supposedly depicting securitization:

Money going to an originator who then lends the money to the borrower.

Money going to a named REMIC “Trust” for the purpose of purchasing loans or anything else.

Money going to the alleged unnamed beneficiaries of a named REMIC “Trust.”

Money going to the alleged unnamed investors who allegedly purchased “certificates” allegedly issued by or on behalf of a named REMIC “Trust.”

Money going to the originator for sale of the debt, note and mortgage package.

Money going to originator for endorsement of note to alleged transferee.

Money going to originator for assignment of mortgage.

Money going to the named foreclosing party upon liquidation of foreclosed property.

Money going to the homeowner as royalty for use of his/her/their identity forming the basis of value in issuance of derivatives, hedge products and contract, insurance products and synthetic derivatives.

Money being credited to the obligee’s loan receivable account reducing the amount of indebtedness (yes, really). This is because the obligee has no idea where the money is coming from or why it is being paid. But one thing is sure — the obligee is receiving money in all circumstances.

Payment by third parties may not reduce the debt but it does increase the number of obligees (creditors). Hence in every one of these foreclosures, except for a minuscule portion, indispensable parties were left out and third parties were in reality getting the proceeds of liquidation from foreclosure sales.

First quarter issuance doubled 2016’s total

Editor’s Note: Does anyone else seek stark similarities between what happened in 2007/08 and what is happening now? This is evidence that the housing bubble is complete. By now we know how this will play out in the near future.

Back in February, DBRS predicted that the residential mortgage-backed security market could see a resurgence in 2017 thanks to rising interest rates, which both drive down refinances and make securitization a more financially appealing option.

As it turns out, that’s exactly what’s happening.

A new report from Standard & Poor’s Global Ratings shows that RMBS-related issuance, which S&P defines as prime, re-performing/nonperforming, rental bonds, servicer advances, and risk-sharing deals, doubled in the first quarter of 2017 compared to last year.

According to S&P’s report, there was $14 billion in RMBS-related issuance in 2017’s first quarter, up from $7 billion in the same time period in 2016.

As a result of the strong first quarter, S&P said that it is increasing its 2017 forecast for RMBS issuance from $35 billion to $50 billion.

It should be noted that even if 2017’s total RMBS issuance reaches $50 billion, it would still be below 2015’s total of $54 billion. But $50 billion would top 2016’s total of $34 billion and 2014’s total of $38 billion.

According to the S&P report, 2017’s first quarter issuance consisted of $5 billion in credit risk-sharing deals from Fannie Mae and Freddie Mac and $4 billion of re-performing/non-performing loans.

S&P noted that the rise in jumbo issuance and non-conforming issuance is “positive for markets as issuers are now supplying enough issuance to support the development of a secondary market.”

And if that continues, a “broader scope of mainstream fixed-income investors” should be attracted to the market, S&P adds.

“Given this RMBS issuance surge, we are adjusting our 2017 forecast up to $50 billion and will have to continue monitoring the various components,” S&P states in the report. “The $5 billion of (risk-sharing) issuance suggests it reaching an issuance pace that has allowed it to be an ongoing investment program for many market participants.”

S&P’s report also compared securitization volume for consumer loans (auto loans, credit cards, commercial loans) and residential mortgages over the last 15 years.

The report shows that all four loan categories have grown substantially since 2001, but the volume of securitization in each category is down.

“Compared to 2007 leverage levels, residential mortgages today are $1 trillion less, whereas the other three loan products have substantially more leverage,” S&P notes in its report.

“Looking at the share of those that are securitized, all markets have seen lower utilization of securitization, with auto loans at 17.5% securitized, credit cards at 13%, CMBS at 17%, and non-agency RMBS at only 8%,” the report continues. “For the various products, these utilization rates are significantly lower than rates used in 2001, 2004, or 2007.”

The report states auto, credit card, and residential loans each saw an increase in the first quarter, which could be the start of some institutions increasing their securitization utilization. On the other hand, it may reflect the issuers taking advantage of “near-ideal issuance conditions and demand,” the report states.

Like this:

The banks were not taking risks. They were making risks and profiting from them. Or another way of looking at it is that with their superior knowledge they were neither taking nor making risks; instead they were creating the illusion of risk when the outcome was virtually certain.

Securitization as practiced by Wall Street and residential “mortgage” loans is not just a void assignment. It is a void loan and an enterprise based completely on steering all “loans” into failure and foreclosure.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-

Perhaps this summary might help some people understand why bad loans were the object of lending instead of good loans. The end result in the process was always to steer everyone into foreclosure.

Don’t use logic and don’t trust anything the banks put on paper. Start with a blank slate — it’s the only way to even start understanding what is happening and what is continuing to happen. The following is what you must keep in mind and returning to for -rereading as you plow through the bank representations. I use names for example only — it’s all the same, with some variations, throughout the 13 banks that were at the center of all this.

The strategic object of the bank plan was to make everyone remote from liability while at the same time being part of multiple transactions — some real and some fictitious. Remote from liability means that the entity won’t be held accountable for its own actions or the actions of other entities that were all part of the scheme.

The goal was simple: take other people’s money and re-characterize it as the banks’ money.

Merrill Lynch approaches institutional investors like pension funds, which are called “stable managed funds.” They have special requirements to undertake the lowest possible risk in every investment. Getting such institutional investors to buy is a signal to the rest of the market that the securities purchased by the stable managed funds must be safe or they wouldn’t have done it.

Merrill Lynch creates a proprietary entity that is neither a subsidiary nor an affiliate because it doesn’t really exist. It is called a REMIC Trust and is portrayed in the prospectus as though it was an independent entity that is under management by a reputable bank acting as Trustee. In order to give the appearance of independence Merrill Lynch hires US Bank to act as Trustee. The Trust is not registered anywhere because it is a common law trust which is only recognized by the laws of the State of New York. US Bank receives a monthly fee for NOT saying that it has no trust duties, and allowing the use of its name in foreclosures.

Merrill Lynch issues a prospectus from the so-called REMIC entity offering the sale of “certificates” to investors who will receive a hybrid “security” that is partly a bond in which interest is due from the Trust to the investor and partly equity (like common stock) in which the owners of the certificates are said to have undivided interests in the assets of the Trust, of which there are none.

The prospectus is a summary of how the securitization will work but it is not subject to SEC regulations because in 1998 an amendment to the securities laws exempted “pass-through” entities from securities regulations is they were backed by mortgage bonds.

Attached to the prospectus is a mortgage loan schedule (MLS). But the body of the prospectus (which few people read) discloses that the MLS is not real and is offered by way of example.

Attached for due diligence review is a copy of the Trust instrument that created the REMIC Trust. It is also called a Pooling and Servicing Agreement to give the illusion that a pool of loans is owned by the Trust and administered by the Trustee, the Master Servicer and other entities who are described as performing different roles.

The PSA does not grant or describe any duties, responsibilities to be performed by US Bank as trustee. Actual control over the Trust assets, if they ever existed, is exercised by the Master Servicer, Merrill Lynch acting through subservicers like Ocwen.

Merrill Lynch procures a triple AAA rating from Moody’s Rating Service, as quasi public entity that grades various securities according to risk assessment. This provides “assurance” to investors that the the REMIC Trust underwritten by Merrill Lynch and sold by a Merrill Lynch affiliate must be safe because Moody’s has always been a reliable rating agency and it is controlled by Federal regulation.

Those institutional investors who actually performed due diligence did not buy the securities.

Most institutional investors were like cattle simply going along with the crowd. And they advanced money for the purported “purchase” of the certificates “issued” by the “REMIC Trust.”

Part of the ratings and part of the investment decision was based upon the fact that the REMIC Trusts would be purchasing loans that had already been seasoned and established as high grade. This was a lie.

For all practical purposes, no REMIC Trust ever bought any loan; and even where the appearance of a purchase was fabricated through documents reflecting a transaction that never occurred, the “purchased” loans were the result of “loan closings” which only happened days before or were fulfilling Agreements in which all such loans were pre-sold — i.e., as early as before even an application for loan had been submitted.

The normal practice required under the securities regulation is that when a company or entity offers securities for sale, the net proceeds of sale go to the issuing entity. This is thought to be axiomatically true on Wall Street. No entity would offer securities that made the entity indebted or owned by others unless they were getting the proceeds of sale of the “securities.”

Merrill Lynch gets the money, sometimes through conduits, that represent proceeds of the sale of the REMIC Trust certificates.

Merrill Lynch does not turn over the proceeds of sale to US Bank as trustee for the Trust. Vague language contained in the PSA reveals that there was an intention to divert or convert the money received from investors to a “dark pool” controlled by Merrill Lynch and not controlled by US Bank or anyone else on behalf of the REMIC Trust.

Merrill Lynch embarks on a nationwide and even world wide sales push to sell complex loan products to homeowners seeking financing. Most of the sales, nearly all, were directed at the loans most likely to fail. This was because Merrill Lynch could create the appearance of compliance with the prospectus and the PSA with respect to the quality of the loan.

More importantly by providing investors with 5% return on their money, Merrill Lynch could lend out 50% of the invested money at 10% and still give the investors the 5% they were expecting (unless the loan did NOT go to foreclosure, in which case the entire balance would be due). The balance due, if any, was taken from the dark pool controlled by Merrill Lynch and consisting entirely of money invested by the institutional investors.

Hence the banks were not taking risks. They were making risks and profiting from them. Or another way of looking at it is that with their superior knowledge they were neither taking nor making risks; instead they were creating the illusion of risk when the outcome was virtually certain.

The use of the name “US Bank, as Trustee” keeps does NOT directly subject US Bank to any liability, knowledge, intention, or anything else, as it was and remains a passive rent-a-name operation in which no loans are ever administered in trust because none were purchased by the Trust, which never got the proceeds of sale of securities and was therefore devoid of any assets or business activity at any time.

The only way for the banks to put a seal of legitimacy on what they were doing — stealing money — was by getting official documents from the court systems approving a foreclosure. Hence every effort was made to push all loans to foreclosure under cover of an illusory modification program in which they occasionally granted real modifications that would qualify as a “workout,” which before the false claims fo securitization of loans, was the industry standard norm.

Thus the foreclosure became extraordinarily important to complete the bank plan. By getting a real facially valid court order or forced sale of the property, the loan could be “legitimately” written off as a failed loan.

The Judgment or Order signed by the Judge and the Clerk deed upon sale at foreclosure auction became a document that (1) was presumptively valid and (b) therefore ratified all the preceding illegal acts.

Thus the worse the loan, the less Merrill Lynch had to lend. The difference between the investment and the amount loaned was sometimes as much as three times the principal due in high risk loans that were covered up and mixed in with what appeared to be conforming loans.

Then Merrill Lynch entered into “private agreements” for sale of the same loans to multiple parties under the guise of a risk management vehicles etc. This accounts for why the notional value of the shadow banking market sky-rocketed to 1 quadrillion dollars when all the fiat money in the world was around $70 trillion — or 7% of the monstrous bubble created in shadow banking. And that is why central banks had no choice but to print money — because all the real money had been siphoned out the economy and into the pockets of the banks and their bankers.

TARP was passed to cover the banks for their losses due to loan defaults. It quickly became apparent that the banks had no losses from loan defaults because they were never using their own money to originate loans, although they had the ability to make it look like that.

Then TARP was changed to cover the banks for their losses in mortgage bonds and the derivative markets. It quickly became apparent that the banks were not buying mortgage bonds, they were selling them, so they had no such losses there either.

Then TARP was changed again to cover losses from toxic investment vehicles, which would be a reference to what I have described above.

And then to top it off, the Banks convinced our central bankers at the Federal Reserve that they would freeze up credit all over the world unless they received even more money which would allow them to make more loans and ease credit. So the FED purchased mortgage bonds from the non-owning banks to the tune of around $3 Trillion thus far — on top of all the other ill-gotten gains amounting roughly to around 50% of all loans ever originated over the last 20 years.

The claim of losses by the banks was false in all the forms that was represented. There was no easing of credit. And banks have been allowed to conduct foreclosures on loans that violated nearly all lending standards especially including lying about who the creditor is in order to keep everyone “remote” from liability for selling loan products whose central attribute was failure.

Since the certificates issued in the name of the so-called REMIC Trusts were not in fact backed by mortgage loans (EVER) the certificates, the issuers, the underwriters, the master servicers, the trustees et al are NOT qualified for exemption under the 1998 law. The SEC is either asleep on this or has been instructed by three successive presidents to leave the banks alone, which accounts for the failure to jail any of the bankers that essentially committed treason by attacking the economic foundation of our society.

Mnuchin was and remains “the guy between the guys.” Billed as the organizer of OneWest his role was to provide a layer between the founders and the rest of the world. His prospective appointment As Secretary of the US Treasury means that the TBTF banks would have a lackey to do what the banks wanted the US Treasury to do.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-

*

It is reported that OneWest foreclosed on 40,000 homes. I have already described to you that Foreclosures sponsored or initiated by OneWest were very often done in the name of another entity. For example, Fannie Mae or Freddie Mac. Those are not counted in the number of homes foreclosed by OneWest. My experience is that the number of homes foreclosed where OneWest was the party “pulling the strings” (not entirely accurate since control was centralized far from OneWest) is at least equal to the number reported for foreclosure cases in which OneWest was the foreclosing party.

*

The average “originated” principal amount of debt in which a homeowner received financial benefit from a direct receipt of funds or funds paid out on behalf of the homeowners to pay off an old “loan” or to pay the seller is reported as an average of $225,000.

The rest is arithmetic. If you multiply the number of foreclosures reported (40,000) times the principal amount of debt that a rose from the origination of transactions with homeowners on refi or prospective homeowners who were buying ($225,000) then you get a total of $9,000,000,000.

*

If you look at the deal between the FDIC, the US Bankruptcy Trustee for IndyMac, and OneWest, you will not find $9 billion in consideration for the purchase of loans by OneWest from the IndyMac estate. Both the FDIC and the US Bankruptcy Trustee were under a duty to maximize the return to creditors. They did not receive $9 billion for sold loans because there were no loans to sell. OneWest principals merely put up or promised to commit around $1-$2 Billion in capital to qualify as a bank and to take over the service contracts and brick and mortar locations of IndyMac. This is nearly identical to the Chase-WAMU deal.

*

But there is more: under a very lucrative loss sharing agreement with the FDIC, OneWest submitted claims to the FDIC to cover 80% of the alleged losses on nonperforming loans and then, after getting paid, proceeded to foreclose for the whole amount.

*

There is no evidence of any particular loan or pool of loans being sold to OneWest for any consideration that traveled from OneWest to either the FDIC as receiver or the US Bankruptcy trustee for the state of IndyMac. Yet OneWest followed the industry practice of stepping AS THOUGH they were the creditor, claiming they were the holder of negotiable paper because the real creditors — investors who advanced money as though they were buying real MBS (which were bogus securities issued by a nonexistent entity that never did any business) — were unaware of the status of their claim against the REMIC Trusts that were ostensibly purchasing loan portfolios but lacked the funding to do so because the Trusts never received the proceeds of sale of the MBS.

*

Second, OneWest did not actually have any business records. They are all fabricated or outsourced (or both) to a subdivision of several different “servicing” entities that are directed by LPS/Blacknight. LPS is tasked with (1) selecting the Plaintiff or beneficiary of a foreclosure (2) collecting and creating records (3) fabrications and forgeries (and robosigning) of assignments, endorsements etc.

*

Bottom Line: OneWest foreclosed on loans in which it was neither the owner nor the servicer. While it acquired servicing rights from IndyMac, the real servicers were selected by “Master Servicers” (underwriters/TBTF Banks) of the nonexistent trusts. So while IndyMac theoretically had servicing rights for the most part the actual job of servicing was done elsewhere, under the watchful eye of LPS. Thus when OneWest acquired the IndyMac servicing “business” it was in a actuality acquiring nothing.

*

Thus approximately $9 billion in foreclosures, as reported in the media resulted in windfall profits to OneWest of a percentage of the liquidated properties, estimated total at around $6 billion, around two thirds of which $6 billion) was given to the “Master Servicers” as “recovery” of “servicer advances” (which neither came from the servicers nor were they advances as the payments were taken from dynamic dark pools consisting mostly of investor money), netting $2 Billion to OneWest plus “servicing fees” despite the fact that they performed very little or no servicing.

*

The organizers of OneWest were billionaires that went into it on the premise and promise that they would make a few billion dollars, although they were never entirely clear on where the profits were coming from. OneWest was then sold after the windfall the profit projections slumped because there were practically no more alleged IndyMac originated “loans” to foreclose. The PR spin was that they were getting out because their temporary agreement to operate OneWest was expiring. But the real reason was that there was nothing left to plunder and the founders were getting increasingly uncomfortable about where the money was coming from. OneWest could have easily slipped into the roles occupied by Ocwen, SPS, Bayview et al etc and “acquired” more loans in Re-REMIC deals, but the founders wanted no part of it.

*

Homeowners lost their homes on the premise that they thought they had a legitimate loan from a legitimate lender. But IndyMac was originating loans under pre-sale agreements that were effective BEFORE even the applications for loans were received. The Purchase and Assumption Agreement provided that the actual lender’s identity would be withheld from the borrower (a direct violation of TILA). The money for the funding of the alleged loan transactions came from the dark pools, the constituents of which were robbed of their right to the notes and mortgages. The irony is that the counterparty to IndyMac’s Purchase and Assumption Agreements were mere conduits and in many cases sham conduits.

*

Mnuchin was and remains “the guy between the guys.” Billed as the organizer of OneWest his role was to provide a layer between the founders and the rest of the world. His prospective appointment As Secretary of the US Treasury means that the TBTF banks would have a lackey to do what the banks wanted the US Treasury to do. This greases the wheels of false securitization. The banks have never stopped in their “perfect” crime wave and are if anything speeding up with false and sometimes true claims of securitization of just about anything — including “servicer advances.” That adds insult to injury in that they are using their scheme of theft from investors and selling rights to participate in the scheme to investors. In the end, it is simply a scheme to use other people’s money and then step into their shoes without them knowing it.

The real question is when government agencies and regulators PLUS law enforcement get the real message: Wells Fargo’s behavior in the account scandal is the tip of the iceberg and important corroboration of what most of the country has been saying for years — their business model is based upon fraud.

Wells Fargo has devolved into a PR machine designed to raise the price of the stock at the expense of trust, which in the long term will most likely result in most customers abandoning such banks for fear they will be the next target.

John Chiang, California Treasurer, has stopped doing business with Wells Fargo because of the scheme involving fraud, identity theft and customer gouging for services they never ordered on accounts they never opened. It is once again time for Government to scrutinize the overall business plan and business map of Wells Fargo and indeed all of the top (TBTF) banks.

Wells Fargo is attempting to do crisis management, to wit: making sure that nobody looks at other schemes inside the bank.

It is the Consumer Financial Protection Bureau (CFPB) that was conceived by Senator Elizabeth Warren who has revealed the latest example of big bank fraud.

The simple fact is that in this case, Wells Fargo management made an absurd demand on their employees. Instead of the national average of 3 accounts per person they instructed managers and employees to produce 8 accounts per customer. Top management of Wells Fargo have been bankers for decades. They knew that most customers would not want, need or accept 5 more accounts. Yet they pressed hard on employees to meet this “goal.” Their objective was to defraud the investing public who held or would buy Wells Fargo stock.

In short, Wells Fargo is now the poster child for an essential defect in business structure of public companies. They conceive their “product” to be their stock. That is how management makes its money and that is how investors holding their stock like it until they realize that the entire platform known as Wells Fargo has devolved into a PR machine designed to raise the price of the stock at the expense of trust, which in the long term will most likely result in most customers abandoning such banks for fear they will be the next target. Such companies are eating their young and producing a bubble in asset values that, like the residential mortgage market, cannot be sustained by fundamental facts — i.e., real earnings on a real trajectory of growth.

So the PR piece about how they didn’t know what was going on is absurd along with their practices. Such policies don’t start with middle management or employees. They come from the top. And the goal was to create the illusion of a rapidly growing bank so that more people would buy their stock at ever increasing prices. That is what happens when you don’t make the individual members of management liable under criminal and civil laws for engaging in such behavior.

There was only one way that the Bank could achieve its goal of 8 accounts per customer — it had to be done without the knowledge or consent of the customers. Now Wells Fargo is trying to throw 5,000 employees under the bus. But this isn’t the first time that Wells Fargo has arrogantly thrown its customers and employees under the bus.

The creation of financial accounts in the name of a person without that person’s knowledge or consent is identity theft, assuming there was a profit motive. The result is that the person is subjected to false claims of high fees, their credit rating has a negative impact, and they are stuck dealing with as bank so large that most customers feel that they don’t have the resources to do anything once the fraud was discovered by the Consumer Financial protection Board (CFPB).

Creating a loan account for a loan that doesn’t exist is the same thing. In most cases the “loan closings” were shams — a show put on so that the customer would sign documents in which the actual party who loaned the money was left out of the documentation.

This was double fraud because the pension funds and other investors who deposited money with Wells Fargo and the other banks did so under the false understanding that their money would be used to buy Mortgage Backed Securities (MBS) issued by a trust with assets consisting of a loan pool.

The truth has emerged — there were no loan pols in the trusts. The entire derivative market for residential “loans” is built on a giant lie. But the consequences are so large that Government is afraid to do anything about it. Wells Fargo took money from pension funds and other “investors,” but did not give the proceeds of sale of the alleged MBS to the proprietary vehicle they created in the form of a trust.

Hence the trust was never funded and never acquired any property or loans. That means the “mortgage backed securities” were not mortgage backed BUT they were “Securities” under the standard definition such that the SEC should take action against the underwriters who disguised themselves as “master Servicers.”

In order to cover their tracks, Wells Fargo carefully coached their employees to take calls and state that there could be no settlement or modification or any loss mitigation unless the “borrower” was at least 90 days behind in their payments. So people stopped paying an entity that had no right to receive payment — with grave consequences.

The 90 day statement was probably legal advice and certainly a lie. There was no 90 day requirement and there was no legal reason for a borrower to go into a position where the pretender lender could declare a default. The banks were steering as many people, like cattle, into defaults because of coercion by the bank who later deny that they had instructed the borrower to stop making payments.

So Wells Fargo and other investment banks were opening depository accounts for institutional customers under false pretenses, while they opened up loan accounts under false pretenses, and then used the identity of BOTH “investors” and “borrowers” as a vehicle to steal all the money put up for investments and to make money on the illusion of loans between the payee on the note and the homeowner.

In the end the only document that was legal in thee entire chain was a forced sale and/or judgment of foreclosure. When the deed issues in a forced sale, that creates virtually insurmountable presumptions that everything that preceded the sale was valid, thus changing history.

The residential mortgage loan market was considerably more complex than what Wells Fargo did with the opening of the unwanted commercial accounts but the objective was the same — to make money on their stock and siphon off vast sums of money into off-shore accounts. And the methods, when you boil it all down, were the same. And the arrogant violation of law and trust was the same.

The crux of this fight is that if the foreclosing parties are forced to identify the creditors they will only have two options, in my opinion: (a) commit perjury or (b) admit that they have no knowledge or access to the identity of the creditor

We have all seen it a million times — the “Trustees”, the “servicers” and their agents and attorneys all beg the question of identifying the names and contact information of the creditors in foreclosure actions. The reason is simple — in order to answer that question truthfully they would be required to admit that there is no party that could properly be defined as a creditor in relation to the homeowner.

They have successfully pushed the point beyond the point of return — they are alleging that the homeowner is a debtor but they refuse to identify a creditor; this means they are being allowed to treat the homeowner as a debtor while at the same time leaving the identity of the creditor unknown. The reason for this ambiguity is that the banks, from the beginning, were running a scheme that converted the money paid by investors for alleged “mortgage backed securities”; the conversion was simple — “let’s make their money our money.”

When inquiry is made to determine the identity of the creditor the only thing anyone gets is some gibberish about the documents PLUS the assertion that the information is private, proprietary and privileged. The case in the above link is from an court of appeals in New York. But it could have profound persuasive effect on all foreclosure litigation.

Reciting the tension between liberal discovery and privilege, the court tackles the confusion in the lower courts. The court concludes that privilege is a very narrow shield in specific situations. It concludes that even the attorney-client privilege is a shield only between the client and the attorney and that adding a third party generally waives that privilege. The third party privilege is only extended in narrow circumstances where the parties are seeking a common goal. So in order to prevent the homeowner from getting the information on his alleged creditor, the foreclosing parties would need to show that there is a common goal between the creditor(s) and the debtor.

Their problem is that they can’t do that without showing, at least in camera, that the identity of the creditor is known and that somehow the beneficiaries of an empty trust have a common goal (hard to prove since the trust is empty contrary to the terms of the “investment”). Or, they might try to identify a creditor who is neither the trust nor the investors, which brings us back to perjury.

In short, the proffer of a document signed not by the grantor or assignor but by a person with limited authority and no knowledge, on behalf of a company claiming to be attorney in fact is an empty self-serving document that provides escape hatches in the event a court actually looks at the document. It is as empty as the Trusts themselves that never operated nor did they purchase any loans.

If you had a promissory note that was payable to someone else, you would need to get it endorsed by the Payee to yourself in order to negotiate it. No bank, large or small, would accept the note as collateral for a loan without several conditions being satisfied:

The maker of the note would be required to verify that the debt and the fact that it is not in dispute or default. This is standard practice in the banking industry.

The Payee on the note would be required to endorse it without qualification to you. Like a check, in which you endorse it over to someone else, you would say “Pay to the order of John Smith.”

The bank would need to see and probably keep the original promissory note in its vault.

The credit-worthiness of the maker would be verified by the bank.

Your credit worthiness would be verified by the bank.

Now imagine that instead of an endorsement from the payee on the note, you instead presented the bank with an endorsement signed by you as attorney in fact for the payee. So if the note was payable to John Jones, you are asking the bank to accept your own signature instead of John Jones because you are the authorized as an agent of John Jones. No bank would accept such an endorsement without the above-stated requirements PLUS the following:

An explanation as to why John Jones didn’t execute the endorsement himself. So in plain language, why did John Jones need an agent to endorse the note or perform anything else in relation to the note? These are the rules of the road in the banking and lending industry. The transaction must be, beyond all reasonable doubt, completely credible. If the bank sniffs trouble, they will not lend you money using the note as collateral. Why should they?

A properly executed Power of Attorney naming you as attorney in fact (i.e., agent for John Jones).

If John Jones is actually a legal entity like a corporation or trust, then it would need a resolution from the Board of Directors or parties to the Trust appointing you as attorney in fact with specific powers to that completely cover the proposed authority to endorse the promissory note..

Verification from the John Jones Corporation that the Power of Attorney is still in full force and effect.

My point is that we should apply the same rules to the banks as they apply to themselves. If they wouldn’t accept the power of attorney or they were not satisfied that the attorney in fact was really authorized and they were not convinced that the loan or note or mortgage was actually owned by any of the parties in the paper chain, why should they not be required to conform to the same rules of the road as standard industry practices which are in reality nothing more than commons sense?

What we are seeing in thousands of cases, is the use of so-called Powers of Attorney that in fact are self serving fabrications, in which Chase (for example) is endorsing the note to itself as assignee on behalf of WAMU (for example) as attorney in fact. A close examination shows that this is a “Chase endorses to Chase” situation without any actual transaction and nothing else. There is no Power of Attorney attached to the endorsement and the later fabrication of authority from the FDIC or WAMU serves no purpose on loans that had already been sold by WAMU and no effect on endorsements purportedly executed before the “Power of Attorney” was executed. There is no corporate resolution appointing Chase. The document is worthless. I recently had a case where Chase was not involved but US Bank as the supposed Plaintiff relied upon a Power of Attorney executed by Chase.

This is a game to the banks and real life to everyone else. My experience is that when such documents are challenged, the “bank” generally loses. In two cases involving US Bank and Chase, the “Plaintiff” produced at trial a Power of Attorney from Chase. And there were other documents where the party supposedly assigning, endorsing etc. were executed by a person who had no such authority, with no corporate resolution and no other evidence that would tend to show the document was trustworthy. We won both cases and the Judge in each case tore apart the case represented by the false Plaintiff, US Bank, “as trustee.”